Apprentice Levy message is keep calm and carry on

July 28, 2016

London First met with the National Apprenticeship Service, now part of the Department for Education, to understand current thinking on the Apprenticeship Levy and to give members an opportunity to shape some of the finer detail.

The levy, designed to ensure employers fund the government’s planned huge expansion in apprenticeships, will be introduced from April 2017 and affect employers in all sectors. The levy will be paid on annual paybills in excess of £3 million at a rate of 0.5%. Many rumours have been circulating about the future of the levy under the new government, but the message was clear: the levy will continue under the new minister responsible for skills, Robert Halfon MP.

However, the much anticipated further guidance for employers on how the levy will work, already delayed from June and expected before parliamentary recess in July, continues to be elusive.

We were told it is sitting on the Minister’s desk awaiting rubber stamping. Employers are rightly concerned about this, given that they need to plan ahead for potentially significant changes to their workforce strategies. In addition, the guidance will set out important details as to how the levy will operate, for example what the funding rates for apprentices will be. Once this guidance is made available, we’ll be following up with further briefings and activity.

We were told that Antony Jenkins, former CEO of Barclays, will chair the new independent Institute for Apprenticeships, which will have oversight of the levy. There was also an indication that the government will seek to address, through future guidance and elsewhere, the key concerns of employers, particularly that current apprenticeship frameworks are not up to scratch and that new ones, needed to meet the modern training needs of business, are not being developed fast enough.

There is still concern that there is a problem with the apprenticeship brand, and a new campaign was announced – ‘Amazing Apprenticeships’ – to promote them in schools as a credible option, comparable with university.

Perhaps of greatest concern was how the government intends to support those employers who currently do offer apprenticeships, particularly in the set up phase. It was suggested that the government will recycle any levy surplus back into the apprenticeship system, and we will need to ensure that happens.

There was also interest in running a follow on workshop with Ofsted for businesses who may wish to become an ‘employer provider’ of apprenticeships. Watch this space for updates.

The presentation delivered by the National Apprenticeship Service can be found here.